Introduction Most US-UK investors spend January regretting December. The December tax planning window closes on 31 December — and once the calendar year ends, the most powerful planning actions are no longer available. The IRS Streamlined Filing Experts at Jungle Tax work with US citizens in the UK throughout the year — but the months […]
Most US-UK investors spend January regretting December. The December tax planning window closes on 31 December — and once the calendar year ends, the most powerful planning actions are no longer available.
The IRS Streamlined Filing Experts at Jungle Tax work with US citizens in the UK throughout the year — but the months of October, November, and December are when the most consequential decisions are made. The PFIC mark-to-market election is an annual decision with year-end consequences. The Roth conversion window closes on 31 December. Tax loss harvesting on the US side of a global portfolio is only possible before year-end. SIPP contributions must be made before 5 April. FTC basket separation requires proactive planning before positions are sold.
This guide covers every year-end tax planning action available to US citizens with global investment portfolios in 2026. It covers what to do, when to do it, and why the sequence matters. Contact Jungle Tax at https://www.jungletax.co.uk/ to begin your year-end planning review.
IRS Streamlined Filing Experts are US-UK tax advisers with specific knowledge of the IRS Streamlined Foreign Offshore Procedures — the voluntary compliance route for non-wilful non-filers — and the ongoing annual filing obligations that follow a Streamlined submission. Year-end planning is a central part of what these specialists do for clients who are back in annual compliance after a Streamlined submission.
A client who completes a Streamlined submission enters an ongoing annual filing. From the first post-Streamlined year onwards, year-end planning determines how much US tax is owed, how much is offset by the foreign tax credit, and how the global portfolio is positioned for the following year. A specialist who knows the client’s full position — from the Streamlined submission onwards — is uniquely placed to manage this.
A UK-only investor has one tax year — 6 April to 5 April — and one set of year-end actions. A US-UK investor has two tax years, two sets of planning actions, and two overlapping sets of deadlines. The US calendar year ends on 31 December. The UK tax year ends on 5 April. Planning actions for the US return must be completed before 31 December. Planning actions for the UK return must be completed before 5 April.
These two windows overlap. The adviser must coordinate actions across both systems simultaneously. A Roth conversion completed in November affects the US December year-end but also affects the income figure on the following April’s UK self-assessment. A SIPP contribution made in March reduces UK taxable income — and also affects the Article 17 treaty election on the subsequent US return.
The IRS guidance on US citizens and resident aliens abroad is published at:
https://www.irs.gov/individuals/international-taxpayers/us-citizens-and-resident-aliens-abroad
This guide covers US citizens and permanent residents living in the UK who hold global investment portfolios — including UK ISAs, SIPPs, UCITS funds, UK equities, and US brokerage accounts — and who want to take every available year-end planning action before the 31 December 2026 deadline.
Every non-US fund — including UCITS funds inside an ISA or SIPP, offshore bonds, and UK-domiciled ETFs — is a passive foreign investment company for US tax purposes. The default PFIC taxation regime — the excess distribution method — taxes gains at the highest ordinary rate plus an interest charge going back to the first year of ownership. The mark-to-market election converts this treatment to annual recognition at ordinary rates — eliminating the punitive interest charge.
The mark-to-market election is made on Form 8621 with the annual federal return. Once made, it applies to all future years unless revoked. The decision to make the election — and the calculation of the mark-to-market gain for the first election year — must be completed before the December year-end. A specialist reviews every PFIC position before 31 December and confirms whether the election is the optimal choice for each position.
A Roth conversion — converting a traditional IRA or 401(k) to a Roth IRA — is a powerful planning tool for US-UK investors. The converted amount is included in US taxable income in the year of conversion. But growth in a Roth IRA is permanently exempt from US tax. For a US citizen living in the UK, the converted amount may be offset by the foreign tax credit from UK income tax paid in the same year, reducing the net US tax on the conversion to nil or near-nil.
The Roth conversion must be completed before 31 December of the relevant year. It cannot be reversed or re-characterized after the year-end. The optimal conversion amount depends on the taxpayer’s UK income, the available FTC basket, and the projected future growth of the retirement account. A specialist calculates the conversion amount before the December deadline.
US brokerage accounts holding individual equities or US-domiciled funds can generate capital losses before 31 December. These losses offset capital gains in the same year, reducing the US capital gains tax owed. Net losses up to $3,000 can also be deducted against ordinary income. Losses in excess of that carry forward indefinitely.
The wash sale rule prevents a taxpayer from repurchasing the same or substantially identical security within 30 days before or after the sale. A specialist plans the loss-harvesting sequence to avoid wash-sale disallowance while maintaining the desired portfolio exposure.
Our guide to IRS Streamlined Filing Compliance — avoiding double taxation on investment income explains the FTC and passive basket rules in detail.
The specialist reviews every fund holding in the client’s portfolio — ISA, SIPP, and general investment account — to identify PFIC positions. For each position, the specialist considers whether the mark-to-market election is already in place, whether a new election is warranted for the current year, and the mark-to-market gain or loss for the year.
For new PFIC positions acquired during the year, the specialist considers whether to make the mark-to-market election for the first year of ownership. The election is generally beneficial for funds with positive long-term growth expectations — because it converts future gains to annual recognition at ordinary rates, avoiding the punitive excess distribution regime.
For existing mark-to-market positions, the specialist obtains the year-end net asset value from the investment platform and calculates the gain or loss for Form 8621. This data must be obtained before the filing deadline — UK platforms do not automatically provide it in a US-compatible format.
The foreign tax credit offsets US tax on foreign-source income. The credit is limited by the income basket in which the income falls. Passive income — dividends, interest, and most investment income — falls in the passive basket. General category income — employment income — falls in the general basket. The credit in each basket cannot exceed the US tax on income in that basket.
A US-UK investor with significant passive income — ISA dividends, SIPP income, UK fund distributions — needs to consider the passive basket FTC limitation before year-end. If the UK tax on passive income exceeds the US tax on the same income, the excess credit is carried forward but cannot be used in the current year.
The specialist reviews the client’s income composition before 31 December. Where the passive basket has excess FTC, the specialist considers whether to realize additional passive income in the current year — to absorb the excess credit — or to defer income to a future year where the basket position is more favorable.
SIPP contributions reduce UK taxable income. A contribution made before 5 April of the UK tax year reduces the income on which UK income tax is charged. For a UK higher-rate taxpayer, a £10,000 SIPP contribution generates a £4,000 reduction in UK income tax. This reduction affects the foreign tax credit available on the US return for the same period.
The specialist reviews the client’s SIPP contribution capacity before the April deadline. The annual contribution limit is £60,000 (for 2025/26). The contribution must be supported by earned income in the same year. Carry-forward of unused allowances from the prior three years is available.
The Article 17 treaty election — which defers US tax on SIPP growth — must be made on the US return for the year of contribution. The specialist confirms this election is included on the annual return alongside the contribution claim.
The optimal Roth conversion amount depends on three factors: the client’s UK income for the current year, the US income tax bracket in which the conversion falls, and the available FTC basket. A conversion that the FTC fully offsets costs the client nothing in US tax, while permanently removing future growth from the US tax system.
The specialist calculates the maximum conversion amount that the FTC can fully offset in the current year. This calculation requires knowing the client’s total UK income, the UK income tax paid on that income, and the US tax rate on the conversion amount. The calculation is completed in October or November — allowing sufficient time to execute the conversion before the December deadline.
In October, the specialist requests year-to-date portfolio statements from the client’s investment platforms. Every PFIC position is identified. The mark-to-market gain or loss for each position is estimated based on year-to-date data. The FTC basket position is estimated based on income received to date.
The specialist also reviews the client’s estimated UK income for the year — employment, rental, and investment income — to project the UK tax liability and the available FTC. This projection forms the basis of the Roth conversion calculation.
In November, the specialist presents the year-end planning options to the client. The Roth conversion amount is confirmed. The tax loss harvesting positions are identified. The PFIC election decisions are made. The SIPP contribution amount is agreed for the April deadline.
The specialist also reviews whether any PFIC positions should be sold before year-end — to crystallize losses or to exit positions before the mark-to-market election is made for the first time. Selling a PFIC position before making the election avoids the excess distribution calculation on prior gains.
In December, the Roth conversion is executed. The tax loss harvesting trades are placed. The mark-to-market elections are confirmed for the upcoming Form 8621 filings. The specialist confirms that all year-end actions have been completed before the 31 December cut-off.
The specialist also prepares a year-end summary for the client — documenting every action taken, every election made, and every amount that will appear on the upcoming US federal return. This summary forms the basis of the return preparation in the following year.
The IRS guidance on Roth IRA conversions is published at:
Marcus is a US citizen living in London. He holds a UK general investment account with four UCITS funds, a Stocks and Shares ISA with two UK equity ETFs, a SIPP with a balanced portfolio, and a traditional IRA in the United States valued at $180,000. He has been in annual compliance for three years since completing a Streamlined submission.
By October 2026, Marcus’s estimated UK income from employment is £95,000. He has paid approximately £28,000 in UK income tax. His UCITS funds have generated approximately £4,200 in dividends during the year. His ISA ETFs have unrealized gains of approximately £18,000. His IRA has grown from $150,000 to $180,000.
The specialist reviewed all six PFIC positions — four UCITS funds and two ISA ETFs. The mark-to-market elections were already in place for all six positions, as in prior years. The specialist obtained estimated year-end NAV data from the platforms and calculated mark-to-market gains of approximately $5,200 across all positions for Form 8621.
The specialist calculated that Marcus had sufficient FTC capacity in the general basket to offset the US tax on a $35,000 Roth conversion. The UK income tax on £95,000 of employment income — approximately $35,200 — exceeded the US tax on the same income at the UK-resident rate. This created FTC headroom of approximately $8,000 in the general basket, which could offset the US tax on the Roth conversion.
Marcus executed the $35,000 Roth conversion in November. The SIPP contribution of £20,000 was scheduled for March 2027 — before the UK tax year-end — using a carry-forward of a prior year’s unused allowance. No tax loss harvesting was required because all positions were in gain.
The $35,000 Roth conversion cost Marcus nil in net US tax — the FTC from his UK employment income fully offset the US tax on the conversion. The converted amount is now permanently in the Roth IRA, where future growth is exempt from US tax. The SIPP contribution reduced his UK income tax by £8,000 at the higher rate. The annual Form 8621 filings for six PFIC positions were prepared with accurate mark-to-market figures.
Contact our IRS Streamlined Filing Experts at hello@jungletax.co.uk or 0333-8807974 to start your 2026 year-end planning review.
The Roth conversion calculation requires knowing the year’s UK income, the UK tax paid, and the available FTC basket. None of these figures is final until close to year-end — but the conversion must be executed before 31 December. A client who starts the calculation in mid-December runs out of time. The specialist begins the projection in October and confirms the conversion amount in November, allowing sufficient time to execute the conversion before the deadline.
UK investment platforms do not automatically provide year-end net asset value data in the format required for Form 8621. The adviser must request it. Many platforms provide this data only after their own year-end processes are complete, which may be January or February. A specialist requests estimated year-end NAV data in November or December — not after the return deadline has passed.
The wash sale rule disallows a capital loss if the taxpayer repurchases the same or substantially identical security within 30 days before or after the sale. This applies to US brokerage accounts. A client who sells a US equity ETF to harvest the loss and immediately repurchases the same fund loses the loss deduction. The specialist plans the loss-harvesting sequence to avoid wash-sale disallowance while maintaining the desired portfolio exposure — typically by purchasing a similar but not identical fund within the 30-day window.
A SIPP contribution reduces UK taxable income — and therefore reduces the UK tax credit available on the US return. If the SIPP contribution reduces the FTC below the amount needed to offset the US tax on the Roth conversion, the conversion may cost more in US tax than expected. The specialist models the SIPP contribution and Roth conversion together — not independently — to confirm that the FTC remains sufficient after both actions.
The HMRC guidance on pension tax relief is published at:
https://www.gov.uk/tax-on-your-private-pension/pension-tax-relief
The SIPP contribution deadline is 5 April — the UK tax year end. Many Americans in the UK operate on a US calendar year mindset and assume they have until 15 April (the US return deadline) to make pension contributions. They do not. A SIPP contribution made on 6 April or later falls in the following UK tax year and does not reduce the current year’s UK income tax liability. The specialist sets the SIPP contribution deadline in the client’s annual planning calendar.
Jungle Tax is a specialist US-UK cross-border tax advisory firm whose team includes IRS Streamlined Filing Experts and UK-qualified tax practitioners with specific experience in year-end planning for US citizens with global investment portfolios. We begin year-end planning reviews in October — not December. We project the UK income, UK tax paid, FTC basket position, and available Roth conversion headroom for every client with a traditional IRA. We review every PFIC position before the December year-end and request estimated NAV data from investment platforms in advance of the filing deadline. We plan tax-loss harvesting sequences that avoid wash-sale disallowance. We coordinate SIPP contributions with the Roth conversion calculation — so that both actions are optimized together. We prepare Form 8621 for every PFIC position, the Article 17 SIPP election on the annual return, and all FTC calculations as part of a single integrated annual filing program. You can find further information on our page at https://www.jungletax.co.uk/, or read our related guide to what happens after the Streamlined submission. Contact our team at hello@jungletax.co.uk or call 0333-8807974 to start your year-end planning review today.
Year-end tax planning for a global portfolio requires actions that close on 31 December — and cannot be reversed or delayed. The IRS Streamlined Filing Experts at Jungle Tax begin planning in October so that every action is completed before the deadline.
Three points matter most. First, the Roth conversion window closes on 31 December. The calculation requires knowledge of the full year’s UK income and the FTC basket position, which means the review must start in October. Second, PFIC mark-to-market elections are annual decisions. Year-end NAV data must be requested from platforms before December closes. Third, the SIPP contribution and the Roth conversion interact. Modeling both together — not independently — ensures the FTC remains sufficient after both actions are executed.
Speak to a Jungle Tax adviser today — contact us at hello@jungletax.co.uk or visit our website https://www.jungletax.co.uk/ to begin your 2026 year-end planning review.
The Roth conversion deadline is 31 December 2026. The conversion must be executed before the calendar year ends — it cannot be completed after year-end and applied to the 2026 tax year. The converted amount is included in the US taxable income for 2026. For US citizens in the UK, the conversion can often be fully offset by the foreign tax credit from UK employment income — meaning the conversion costs nothing in net US tax while permanently removing future growth from the US tax system. The calculation must be completed in October or November to allow sufficient time for execution.
Every non-US fund is a passive foreign investment company for US tax purposes. This includes UCITS funds, UK-domiciled ETFs, offshore bonds, and unit trusts — regardless of whether they are held inside an ISA, a SIPP, or a general investment account. The mark-to-market election converts the punitive excess distribution regime to annual recognition at ordinary rates. For year-end planning, every PFIC position must be reviewed before 31 December. The mark-to-market gain or loss for the year must be calculated using year-end net asset value data obtained from the investment platform.
A SIPP contribution reduces UK taxable income and therefore reduces the UK income tax paid. The reduction in UK tax paid reduces the foreign tax credit available on the US return. For a client who is also executing a Roth conversion in the same year, the SIPP contribution and the conversion must be modeled together — because the SIPP contribution reduces the FTC that would otherwise offset the US tax on the conversion. The SIPP contribution deadline is 5 April — the UK tax year end. The specialist models both actions together before either is executed.
The wash sale rule is a US tax rule that disallows a capital loss if the taxpayer repurchases the same or substantially identical security within 30 days before or after the sale. The rule applies to US brokerage accounts and to sales of US-domiciled securities. It does not apply to UK accounts or UK-domiciled funds under the same terms, but a specialist reviews the specific positions before planning loss-harvesting trades. The rule is particularly important for US-listed ETFs held in both UK and US accounts simultaneously.
Yes — if you have sufficient FTC capacity in the general basket. The foreign tax credit from UK employment income falls in the general basket. A Roth conversion is taxed as ordinary income in the United States, also in the general basket. If the UK income tax on your employment income exceeds the US tax on the same income, you have surplus FTC in the general basket. This surplus can offset the US tax on the Roth conversion — making the conversion tax-free in net US terms. The optimal conversion amount is the amount that uses the surplus FTC exactly without wasting it.
Year-end planning for a US-UK global portfolio involves interacting with rules across two tax systems. The Roth conversion calculation requires knowing the precise UK income, UK tax paid, FTC basket position, and US tax rate on the conversion amount — all before 31 December. The PFIC mark-to-market calculation requires year-end NAV data that most UK platforms do not provide automatically. The SIPP contribution interacts with the FTC calculation. A UK-only accountant cannot perform this analysis. A US-only CPA without UK knowledge cannot perform it either. A specialist US-UK adviser who knows both systems is the only professional who can coordinate all the moving parts correctly.
